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Oil Tax Breaks Help Put America Deeper in the Red, Keep BP in the Black
America just closed out a fiscal year with a $1.3 trillion debt, and guess where a big chunk of that cash went? That’s right – BP’s bank account. The oil giant today reported profit for just the months of July, August and September of $5.14 billion.
You may recall that BP turned the Gulf oil disaster into a $13 billion tax write-off. And Congress blocked the Obama administration’s request to save an average of $3.6 billion a year by eliminating tax breaks for oil and gas companies.
So while America may be in a budget hole, BP’s got a gusher of cash:
BP reported profit of $5.14bn (£3.2bn) for the three months to September, compared with $1.8bn in the same period last year when BP was hit by heavy charges for cleaning up the Gulf spillage.
BP said oil production over the quarter fell by 12% to 3.32m barrels due to the suspension of production in the Gulf, though BP expects production to be higher in the current quarter.
That means that BP has posted a profit of $16 billion in the first nine months of 2011 alone. And pain at the pump is pure profit for BP – thanks to sky-high oil prices, it made those huge profits despite selling less oil.
So what’s BP going to do with that cash? Thanks in part to Congressional inaction on Gulf oil disaster response legislation, BP’s doubling down on risky deepwater drilling:
The American [CEO Bob Dudley], brought in to replace Tony Hayward in the wake of the crisis, said the extra cash would enable it to double its spending on new exploration and to increase its investment in its deep water operations, its giant fields and building its gas operations.
As Congress’ deficit committee considers ways to cut America’s budget deficit by $1.2 trillion, tax giveaways to wildly profitable oil companies should be the first things to go.
Tell your members of Congress that any deficit deal should protect critical conservation programs and eliminate special interest tax breaks.